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The AGR-Lite Wizard:Case Study of the Value of Interactive Software Tools for Farmer and Ranchers Jeff Schahczenski, Agricultural Economist National Center for Appropriate Technology
THE NCAT MISSIONHelping People by championing small-scale, local, and sustainable solutions to reduce poverty, promote healthy communities, and protect natural resources. www.ncat.org
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Sustainability-Resilient Diversity“In every deliberation, we must consider the impact on the seventh generation... even if it requires having skin as thick as the bark of a pine.” —Great Law of the Iroquois” – Resiliency – Diversity – Adaptable – Interdependence
Outline• Brief overview of the problem- crop insurance-crops vs. whole farm revenue• Motivation of the project- the AGR-lite Wizard• Brief demonstration of the software tool• What we learned and what we continue to learn• Other examples• Summary 5
Important National Benefit for Agriculture• Recently predicted that the federal subsidization of crop Insurance premiums could be close to $9 Billion dollars per year through 2022.• Average premium benefit is about 62% of the cost.• In 2011 over $11 Billion paid out in losses• In 2012 could be as high as $22 Billion!
Is Good Crop Insurance for Small Diverse Farms Possible?• “Good”- meaning reasonably priced and with effective coverage• “Good”- meaning as good as current commodity or specialty crop-based policies
Why Whole Farm Revenue Insurance Adjusted Gross Revenue Lite• Crops with no Multi-Peril (Yield) or Revenue Insurance• Commodities with premium prices• Organic and specialty crops• Varietal differences in yield and price• Provides for quality losses• Livestock
MOTIVATION of Project Several reasons given as to why the use of AGR-Lite has been so low among farmers. Some of the reasons given are:• COMPLEXITY: AGR-Lite requires farmers to have in place a fairly high-level and extensive farm and financial recordkeeping system to be able to meet application requirements .• OUTREACH: The product is still not available nationally and some farmers may simply not know that the product is available in their state.• LIMITATIONS: The level of coverage may be too low and deductibles too high to interest farmers. The effective coverage for AGR-Lite is 72% so that a 28% drop in revenue could be experienced before any coverage is provided. A 28% drop in revenue may effectively put a farmer out of business.• LIMITATIONS: Commercial crop insurance agents find writing and filling claims for AGR-Lite complicated and very time consuming causing them to not promote the product to potential costumers. 16
AGR-Lite Wizard• CD available for PC (no Mac version) - Sept. 15th for 2013• www.agrlitewizard.com 17
SOFTWARE DEVELOPMENT IS HARD• ENGAGE farmers(end users)– from the start• Listen carefully to their needs (eligibility vs details)• Extensive proto-type testing– get expertise, use real farmers• NEW VERSIONS will be needed– IT overhead is real cost• Good GRAHICS really help 18
Critical Improvements• Coverage too low- or deductable to high• Premium costs do not decline with diversity• Application process and information intensity needed to be lowered---AGR-lite Wizard helps• Whole farm revenue should be available nationwide 19
Other Examples and Needs?• Food Safety Plan• Conservation Management Tool
SOFTWARE can change the world 2012 Senate Farm Bill 21
Summary• Understanding of complexity can be enhanced by user-directed software tools• User-directed software tools allow the user to choose how much and how little they want to understand complexity• Knowledge is power and it helps with farmer /government bureaucracy interaction• Understanding can help constructive democratic change 22